I’m in overcast San Diego at a series of business conferences put on by the Women Presidents’ Organization (WPO). The first session today is on “The Seven Costliest Employment Mistakes: What YOU Must Do to Protect and Sustain Your Business!” Our speaker are part of a boutique law firm, Nukk-Freeman & Cerra, that specialize in Employment Law.
For those of you that have employees (and some of these apply mostly to companies over 50 employees), here are the Seven Costliest Mistakes according to our expert speakers:
1. Not properly understanding Fair Labor Standards Act (FLSA) and similar state laws.
Audits are on the rise as this becomes an income generating area for cash strapped states. These issues cover overtime exemptions, employees versus independent contractors and the biggie, a class action lawsuit.
2. Have an employee handbook to create and enforce company standards. These are used to communicate expectations and establish consistent practices, have the mandatory policies (anti-harrassment, whistleblower). Another key is that you must have employees sign that they read the handbook.
3. Avoid and defend litigation through effective anti-harassment training. You want to make sure that your managers know what their responsibilities are. The laws have changed and it’s important that everyone be updated.
4. Use restrictive covenants. These are things like confidentiality agreements, non-competes and non-solicitation agreements. If you would be hurt by having someone leave your employ, open up a competing firm and start soliciting your customers or employees, then this is something you need to have.
5. Reduce risks of wrongful termination claims with carefully structured workforce reductions. It’s important to keep in mind that there are “good” ways to terminate and “bad” ways to terminate. You need to analyze applicable laws, analyze and document business reasons for letting people go, establish selection criteria and determine entitlement to severance.
6. Ensure compliance with the new COBRA subsidy program enacted in February. Subsidizes 65% of COBRA premium, applies to employees terminated from 9/1/08 to 12/31/2009, new notice requirements and reimbursement issues.
7. Be aware of new lawssuch as the illy Ledbetter Fair Pay Act, new FMLA regulations, Employee Free Choice Act, Paycheck Fairness Act, Aribration Act etc…